MASkargo Remains Resilient In Challenging Times
Issued on 10 April 2009

SELANGOR (Subang), 10 April 2009 – Malaysia Airlines Cargo Sdn Bhd (MASkargo) is taking appropriate cost cutting measures to weather the storm as the situation in the air cargo market is now dire, as demand around the world continue to face monthly declines.

According to the Association of Asia Pacific Airlines (AAPA), in the whole of 2008 the cargo traffic of its 17 member airlines, expressed in freight tonne kilometers (FTKs), declined 6.1%. While carriers reduced cargo capacity accordingly, the average cargo load factor for the year still fell by one percentage point to 65.6%.

When met at an informal Hi-Tea session this evening, Managing Director Shahari Sulaiman said that the air cargo industry now faces an unprecedented fall in demand and revenues. The plunge in business has been so dramatic in the past four months that it is almost impossible to use the same cargo business plan and strategy as last year.

"This recession looks like one of the deepest since the 1930s. Air freight volumes collapsed at the end of last year to a shocking level as compared to the same quarter a year ago. Though certain areas may have improved such as the global decline in fuel prices, yet the industry still faces many crucial issues such as the increase in the number of competitors in the market, significant fall in cargo revenue and some even suspect a substantial fall in both freight and yields.

"Competition is so steep. Cargo carriers are reducing their freight rates in a bid to boost volumes thus causing operators to face intense financial pressure.

"Everyone is trying to figure out the best way to resolve this problem. MASkargo, just like other airlines, has announced several initiatives that include cutting cost across the board without compromising on quality and standards of service.

"The situation is so complex that we have suspended a few routes as a temporary measure and they will be reinstated once demand picks-up again. However, passenger flights to these destinations are still continuing. The cutting of routes has also allowed MASkargo to save on flight costs, as fewer planes are being used now.

Therefore, two planes – namely a 747-400F and a 747-200F are not being used for normal cargo shipment instead they are being utilised to fulfil our charter business requirements.

"Although certain routes have been taken of the network schedule, particularly those that have fallen in demand, MASkargo has however added extra flights to the Gulf region, which will be serviced by an Airbus 300-600 freighter, and has also added Colombo as a new weekly destination in response to demand for cargo space from Europe.

"We are amidst efforts and negotiation to further reduce our cost. All units across the board have been given strict instructions to further reduce their cost by 10% on fixed and operational costs within the year. Also, negotiations are currently underway with the government and various service providers to aid in the reduction of flight and operational costs.

"In view of the sluggish economic meltdown, the importance of providing an effective, efficient, and economic logistics solutions becomes even stronger as we weather the storm to keep business moving," said Shahari


Media Inquiries: